90 Michigan CUs Tap Government Program To Help 'Hardest Hit'
SOUTHFIELD, Mich.-A new government program, coupled with the cooperation of private lenders that include scores of credit unions, is taking aim at filling the gap left by the Home Affordable Modification Program (HAMP) to help keep consumers in their homes.
About 90 credit unions, either individually or through the CUSO Member First Mortgage here, are helping distressed homeowners in Michigan through the Innovation Fund for the Hardest Hit Housing Markets. Along with 17 other states and the District of Columbia, Michigan qualified for the $2-billion assistance program; the rust belt state will receive more than $154-million in aid.
Dave Toepp, president/CEO at Mortgage Center, a CSUO in Southfield, Mich., said the new fund helps fill the gap left by programs like HAMP, which disqualifies candidates if they are currently jobless.
"They can't get helped because they're unemployed, so it's a vicious circle," he explained. "But Hardest Hit comes in and it's specifically made for those who are unemployed. The bad news is that the program is not looked at as a long-term solution."
The program allows those who have fallen on hard times to have up to half of their mortgage payment, or $750, whichever is less, paid by taxpayer funds. But the program has a cap of $9,000 per household and the subsidy ends after 12 months or up to three months after the unemployed household provider finds new work, whichever comes first.
As other states prepare to bring their Hardest Hit programs online, they have turned to Michigan as a model, which Toepp believes is a good idea.
"We were actively involved in the plan for the program with (Michigan Sate Housing Development Authority). I think they did a good job bringing in various lenders, big small and in between and everybody's perspective is different," he said.
The Michigan State Housing Development Authority hopes to help up to 24,000 unemployed homeowners through the program, which could take up to 18 months to fully distribute its funding. In just a few weeks the program has moved quickly; Mortgage Center has already approved 12 families for funding, with many more in the pipeline. Toepp was quick to point out that while HAMP and the Hardest Hit Fund ascribe names to certain practices, the CUSO and many credit unions in Michigan had been involved in similar modifications well before the programs launched.